In terms of pay increases they can happen for a variety of reasons but the most common in terms of childcare are the following:
- Due to an increase in the national minimum wage
- To recognise performance
- Due to promotion or increased responsibility
Timing wise pay rises can occur throughout the year but since the introduction of the national minimum wage popular times have been 1st October or 1st April, with 1st April being the most popular time for increases to tie in when the national minimum wage is reviewed.
There is no requirement for an employee who receives more than the national minimum wage to see their wages increase in April. The phrase ‘maintaining the differential is often used to describe the decision making that goes on when employers need to decide whether to continue to maintain the same margin when the Government sets the wage increase. It’s great if you can do this, but may not always be possible.
In terms of women on maternity leave then we have to bear in mind the Court of Appeal case in Alabaster and Barclays Bank from 2005. This is a case where the wage increase impacted the period when the employer calculated the maternity pay. In this case it was decided that if the effective date of a pay rise occurred in between the beginning of the relevant period (i.e. the 15 weeks before the 11th week prior to the week of confinement) and the end of the maternity leave period then it would impact the first 6 weeks of statutory maternity pay.
Therefore if you are giving pay rises on 1st April due to the national minimum wage and your employee is on maternity leave then they would benefit from this increase when they come back to work. If they haven’t taken their accrued leave before 1st April, any holiday taken after that date would be at the new hourly rate.
If you are basing an increase on performance then you would need to decide whether it was reasonable to calculate the increase based on the expected performance during the maternity leave, use the period immediately before maternity leave, or wait and review on return and back date.
If you need any assistance managing employees in your Day Nursery, Pre-school or Out of School Clubs just call 01527 909436.